Plan Sponsor News

October is National Retirement Security Month, which makes it a good time to look at how confident workers are about having enough money for retirement and what’s standing in the way.

Results from the 2024 EBRI Retirement Confidence Survey paint a clear picture: Debt can significantly impact workers’ confidence about their financial security in retirement. According to the findings, 50% of those who are confident about their retirement have managed to steer clear of debt troubles.¹ On the flip side, 66% of those who don’t feel confident point to major debt as a concern.²

Mutual of America is dedicated to supporting your employees on their journey to financial wellness and a secure retirement. We understand that informed employees are empowered employees, which is why we offer educational workshops to boost financial literacy on topics such as:

• Budgeting: This presentation covers budgeting tools and rules, the importance of an emergency fund and ways to manage debt to help employees avoid future debt.

• Credit Scores and Credit Card Debt: Our resources delve into the importance of building credit, factors that impact a credit score and strategies to reduce debt.

• Student Loan Debt: This seminar looks at numbers around national student loan debt, ways to reduce monthly payments and the value of taking advantage of a workplace retirement plan.

Your participant account specialist welcomes the opportunity to educate your employees on debt management. If you think your employees would benefit from one of the above workshops, please contact your Mutual of America specialist.

¹2024 EBRI Retirement Confidence Survey. Funders Report. Page 18.
²2024 EBRI Retirement Confidence Survey. Funders Report. Page 20.

There are many reasons why financial markets go through periods of volatility. Most, if not all, are out of the everyday investor’s control. That doesn’t change the fact that it can be a bit nerve-wracking for your employees to see the impact on their retirement savings. Mutual of America has tips to help them navigate turbulence while continuing to plan for their future.

It’s important to remember that trying to outsmart the market—jumping in and out in hopes of catching the highs and avoiding the lows—often doesn’t result in higher returns. Historically, it’s been better to stay in the market for the long haul, as the example below shows.

History shines a light on the pitfalls of timing the market

This chart is for illustrative purposes only and does not represent the performance of any investment or group of investments. Past performance is no guarantee of future results. The S&P 500 Index is an unmanaged stock index generally considered to be representative of the U.S. stock market. It is not possible to invest directly in an index.
Source: FactSet Financial Data and Analytics

Simply missing a handful of the best market days over a 30-year period could have significantly impacted an individual’s long-term savings potential. For instance:

If you made a $10,000 investment on January 1, 1994, and stayed in the S&P 500^® through December 31, 2023, your investment would equal $175,541.¹
If you missed out on the best five days trying to time the market, your investment would have shrunk to $110,840.¹

Retirement planning through a long-term lens

A diversified portfolio is important when it comes to saving for retirement. Employees may want to review their asset allocation to ensure it aligns with their age, expected retirement date and risk tolerance and reflects their long-term goals. By continuing to invest regularly regardless of market conditions, employees can take advantage of dollar-cost averaging and, by staying invested, benefit from compounding on any earnings over time.

As a plan sponsor, you can count on Mutual of America for educational resources for your participants, including seminars on diversification and market volatility. Contact your local Mutual of America representative to learn more.

¹FactSet Financial Data and Analytics
These numbers are for illustrative purposes only and does not represent the performance of any investment or group of investments. Past performance is no guarantee of future results. The S&P 500 Index is an unmanaged stock index generally considered to be representative of the U.S. stock market. It is not possible to invest directly in an index.

Moving into Q4, your organization could streamline your plan administration and potentially avoid audit by taking advantage of the involuntary cash-out provision for 401(k) and 403(b) plans. The cash-out increase—from $5,000 to $7,000—went into effect earlier this year as part of the SECURE 2.0 Act.

As a reminder, the provision allows you as a plan sponsor to minimize the number of inactive accounts in your company’s 401(k) or 403(b) plans—and allows you to distribute small balances to former employees.

Here’s a snapshot of how an account’s balance impacts cash-out distributions:

The increased cash-out limit can benefit both plan sponsors and participants by potentially:

Reducing plan costs
Eliminating the need to track down missing participants
Helping former participants consolidate retirement savings from multiple accounts
Exempting sponsors from annual plan audit requirements—if the number of participants drops below 100

As always, please reach out to your local Mutual of America representative with any questions.